Australia-China Free Trade Agreement Research Articles

Intersecting Trade, Politics and Human Rights: The Negotiation Phase of the Australia-China Free Trade Agreement

This article concerns a free trade agreement (FTA) between Australia and China signed on 17 June 2015. It has been acclaimed that this agreement lays the foundation for the next phase of Australia’s economic relationship with China and predicted that it will unlock significant opportunities for Australia as China is Australia’s largest export market for both goods and services, accounting for nearly a third of total exports, and a growing source of foreign investment. However, concerns have been expressed that the Australia-China Free Trade Agreement is likely to have a number of retrogressive effects on the protection and promotion of human rights, including labour standards. This article explores differences between the free trade agreement negotiating precepts and cultures of China and Australia and the status of human rights in those negotiations, with an emphasis on understanding representative Australian attitudes. Although those negotiations are now a faint accompli, they are nevertheless of great interest. The article’s focus on the fate of human rights in the negotiation phase of the Australia-China Free Trade Agreement from the Australian perspective, together with the dynamics and nuances of the negotiation process giving rise to the Agreement, provides timely and significant insight on the implementation process, as well as a lesson-learned for future free-trade negotiations. The article argues that human rights should not be overlooked in the negotiations that lead to a free trade agreement. The article comprises seven parts. Section 1 introduces the subject-matter. Section 2 provides a historical overview of trade relations between Australia and China. Section 3 considers the complexity of negotiations between the two States and their different expectations and approaches. Section 4 outlines Australia’s major international human rights obligations including labour standards. Section 5 highlights specific human rights concerns raised in Australia during the Australia-China Free Trade Agreement negotiations. Section 6 observes other States’ approaches to human rights issues when negotiating their FTAs with China. Section 7 concludes that robust safeguards must be embedded and that a close consideration should be given to the implementation process, including the ex post human rights impact assessment of the Australia- China Free Trade Agreement.

Contestability ‘theory’, its links with Australia’s competition policy, and recent international trade and investment agreements

ABSTRACTThis article examines how contestable market theory (contestability) has come to reconfigure the economic and regulatory concept of competition in order to enhance the compatibility of Australia’s economy with international trade and investment agreements. Australia has recently negotiated and signed a raft of bilateral, plurilateral and regional agreements, including the Trans-Pacific Partnership Agreement and the Australia–China Free Trade Agreement. In order to ensure that Australia meets its obligations and commitments to these agreements, two key advisory bodies—the Harper Panel on Competition Policy Review and the Financial System Inquiry—made recommendations, the majority of which were accepted by the government, to ready Australia’s competition governance and economic policy for greater global integration. Such impact is dependent on, among other things, how domestic competition policy meshes with the free market ideology underpinning such international agreements, which favours the breakdown of barriers to markets. Less well known is the role of contestability in radicalising ideology as it countenances monopolisation and privatisation in the guise of market access by justifying the substitution of actual competition with the mere threat of competition. The article concludes that the monopoly power of transnational corporations will be enhanced through the acquiescence of governments to the new governance regime of the Trans-Pacific Partnership Agreement, which, supported by domestic policy, is set to redraw competition policy in the light of contestability theory.

The Australia-China Free Trade Agreement and the Growing Acceptance of Chinese State Capital Investment

This article maps the rising influence of state capital as an increasingly valuable source of liquidity in global capital markets and foreign direct investment. In particular, this article considers how this rising influence is changing the perceptions ofinvestee nations towards foreign state capital investments. Using the example of the AustralianChinese Free Trade Agreement finalised in November 2014, this article contends that although prima facie Australia has maintained a hardline policy stance towards Chinese inward state capital, closer examination reveals an increasing acceptability of Chinese state capital over time in Australia. Such a long-term policy recalibration has the potential to be repeated in other jurisdictions in the Asia-Pacific region.

On Re-invigorating the Australia-China Free Trade Agreement Negotiation Process

Driven by both economic and geopolitical imperatives, negotiation of the Australia-China Free Trade Agreement (ACFTA) has been slow and difficult. The negotiation process has reached an impasse since the latest round took place in March 2012. Major reasons for this include difficulties encountered in negotiating on agriculture, services, investment, and government procurement contracts and surrounding populist resistance from both Australian and Chinese domestic constituencies. Following more than eight years of negotiations and establishment of closer trade related ties, there is a lot at stake for both countries in the outcome of these discussions. This paper examines these issues and of the way forward towards a workable negotiation process.

Dispute Settlement under Free Trade Agreements: The Proposed Australia-China Free Trade Agreement

This article focuses on what would be an appropriate framework for dispute settlement to be adopted in the forthcoming Australia-China free trade agreement (ACFTA) currently being negotiated.

The Proposed Australia-China FTA: Protectionism over Complementarity?

This article deals with the proposed high-profile Australia-China Free Trade Agreement (FTA). It recognizes their economic complementarities for an FTA. However, their negotiations reveal many competing interests, militating against an FTA. If political enthusiasm succeeds in concluding this FTA, it is likely to fall short of delivering the projected economic benefits. This FTA will possibly be an inward looking discriminatory trading arrangement with exclusive preference to each other in selective sectors and protection against non-members, inconsistent with Article XXIV of the General Agreement on Tariffs and Trade (GATT). Such protectionist obsessions have become an obstructive alternative to multilateral nondiscriminatory trade rendering it more onerous and less viable. Concluding such an FTA, at a time when World Trade Organization (WTO) Panels and Appellate Body (AB) are increasingly dealing with FTA disputes, may result in a legal challenge. The booming Australian and Chinese export sectors need open global markets to maximize their full trade potentials, which can be achieved through the completion of the Doha Round.

In the Shadow of the Australia-China Free Trade Agreement Negotiation: Obstacles and Suggestions

Since the 1990s, regional trade agreements have come to complement multilateral trade agreements as a major means for promoting free trade. With free trade agreements spreading across Europe, the Americas and East Asia, China and Australia entered into negotiations for an Australia – China free trade agreement (ACFTA) in 2005. So far, fourteen rounds of talks have been held. However, negotiations between the two countries seem to have come to a standstill with no substantial progress has been made since December 2008. This article seeks to explain why the negotiations of the ACFTA have been extremely difficult. It points out that while Canberra wants to gain more market access in China for Australian firms, particularly access to agricultural and foreign direct investments sectors, Beijing is more interested in seeking a stable supply of energy resources and raw materials that China needs for her rapidly growing economy. The sticking point has been the differing approaches of the two countries by reason of their differences in level of economic development, understanding of FTA, the logistics of market and non market economies, different political systems, cultural outlook, and the issue human rights. There has also been stubborn resistance in some quarters to a FTA in both countries: in China, against further liberalisation of the agricultural and services sectors beyond the level of her World Trade Organisation (WTO) commitments; in Australia against the potential influx of cheap Chinese goods as well as the risk of losing control of its Resources industry. Additional Australian concerns include China’s poor record on environmental and food safety standards. As a means of overcoming these hurdles, the paper suggests the need for a period of adjustment of the respective markets in the sensitive areas of agriculture, and the services and investment markets. This will condition the constituencies in both countries of the benefits of ACTFA. In this respect, the existing China – New Zealand FTA provisions Special Agricultural Safeguard Measures (Art 13) and Trade in Services (Arts 103-124) provide a useful referent. The paper suggests avenues for breaking the deadlock, and that these lie in terms of institutional changes, and a stronger commitment from the leadership of both economies.Presented at the SIEL 2010 Conference in Barcelona.

GTAP Model Analysis of the Economic Effects of an Australia–China FTA: Welfare and Sectoral Aspects

The Australia–China Free Trade Agreement (ACFTA) is already in the process of being negotiated by the two governments. This paper employs the Computable General Equilibrium (CGE) model using Global Trade Analysis Project (GTAP) database version 6 for a quantitative analysis of the economic effects of proposed ACFTA. Four scenarios are examined in the paper focusing on flexible and fixed current account positions within short run and long run. Equivalent variation (EV) and real consumption are used to measure the welfare effects resulting from the formation of the ACFTA. The results from the GTAP simulations show positive welfare effects for both Australia and China in all cases. Sectoral results show mixed outcomes.

AUSTRALIA‐CHINA FREE TRADE AGREEMENT: CAUSAL EMPIRICS AND POLITICAL ECONOMY

The launch of negotiations for an Australia‐China free trade agreement (ACFTA) started on 18 April 2005, following completion of the joint feasibility study that showed substantial economic and trade benefits for the two countries. The paper reassesses these benefits by means of an empirical analysis with a view to providing improved inputs for informed debate on the benefits and costs of an ACFTA from the perspective of Australia and China. The implications of the findings for policy uses are also discussed.

The proposed Australia-China Free Trade Agreement: global and country-specific effects

Australia has signed Free Trade Agreements (FTAs) with Singapore, Thailand and the USA. This paper analyses the economic effects of the proposed FTA between Australia and China, drawing lessons from simulations undertaken using the GTAP model. The paper provides quantitative evidence concerning the welfare impact of the FTA with special reference to trade creation and trade diversion. Examining responses of various production sectors identifies the structural changes that may take place in the two economies over the long run. The findings may shed light on the debate over the potential incentives to participate in the agreement.

The Australia—China Free Trade Agreement: Some Modelling Issues

General equilibrium modelling has been used to analyse many policy proposals. This article aims to help non-modellers assess general equilibrium analyses, particularly of a potential Australia—China free trade agreement (FTA). General equilibrium modelling is effective in studies of unilateral tariff reductions. However, most general equilibrium modelling assumes given technologies and information. For issues where the essence is technology transfer and new information, general equilibrium models can only produce results after most of the analysis has been done outside the model. In an Australia—China FTA, tariff cuts may be only a small part of the package. The main part may be goodwill, technology transfer and increased mutual awareness. Thus, for analysing FTAs, general equilibrium modelling is of limited value. The only conclusion for Australia that general equilibrium modelling of an Australia—China FTA can deliver with any certainty is that such an agreement will cause significant contraction in the Australian clothing industry.

Australia's Social and Commercial Engagement with China: What Direction for the Relationship?

This article suggests four criteria that any Australian Government should satisfy in promoting new forms of social and commercial engagement in the Australia—China economic and trading relationship. Any Free Trade Agreement (FTA) should require a high level of commitment to meet four standards. First, the inclusion of a labour clause within the agreement. Second, the government must now ensure that there is no disadvantage to Australian industry particularly for the purpose of applying anti-dumping provisions. Third, an Australia—China FTA would need to demonstrate how the economic and trading relationship would become more balanced and why a bilateral FTA will not further compromise the multilateral system. Fourth, the government must demonstrate its commitment to make Australia free trade ready so the nation can maximize the benefits and minimize the costs of commercial engagement with China and other counties. Ultimately corporate globalization will only work for the world's workers and their families when it is underpinned by a fair set of global rules including labour rights.

Ethical Purchasing and Workers' Rights in China: The Case of the Brotherhood of St Laurence

As China continues its economic development and integration with the global economy, pressure is building to ensure international enterprises embrace responsible supply chain management and contribute to improved labour and environmental conditions. Despite China's reputation for having a poor regulatory framework, China's labour law is more comprehensive than that of many Organisation for Economic Co-operation and Development (OECD) countries. What is lacking is an adequate system of enforcement. This article draws on the experiences of an Australian non-governmental organization (NGO) in dealing with the Chinese optical industry to consider the important question of corporate social responsibility in China.1 It begins with an overview of the Brotherhood of St Laurence experience and observations in China, examines the challenges and opportunities of responsible supply chain management and ethical purchasing and the impact on workers' rights, and finally looks at implications for an Australia—China Free Trade Agreement (ACFTA).